Many Happy Returns: Investing In Self Storage By Erin Henley

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    httpinfo.reoptimizer.com_Are you in the market for a self-storage facility? If so, you’re not alone. once considered a secondary real estate investment type, today self- storage is moving to the forefront of the commercial real estate market. More investors are buying properties and consolidating operations, creating what some call the most active self-storage investment market in years. The popularity of self-storage as an investment stems from its favorable returns, especially compared with other real estate sectors. For example, as shown in the charts on page 30, self-storage rEiTs account for only about five percent of the equity rEiT market, yet have one of the highest 10-year com- pound annual return rates, second only to retail. Kurt o’Brien, chief executive officer of orlando, Fla.-based oB companies/ Simply Storage llc, notes that in the right location, self-storage outperforms other real estate sectors. “The main advantage storage offers is reliable future cash flows due to lack of tenant build-out expenses and capital improvement expenses as the property ages,” he says. One disadvantage for self-storage investors is length of time for returns. “generally, investors in self-storage need to be patient—perhaps more patient than in other real estate product types,” says Barry hoeven, presi- dent and founding partner of Westport properties/U.S. Storage centers, based in newport Beach, calif. “Self-storage typically cannot pre-lease like office or retail, so it takes a bit longer for the returns to kick in. however, it appears today that self-storage returns are still a bit better than the four major product types.” Click Here to Read More…
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